Supply chain management has many components. One such component is supply planning. This process aims to figure out the best plan for fulfilling the requirements laid out by the demand plan. The idea is to balance supply and demand to achieve financial and service-related objectives at the company.
This article will take a deeper look at the supply planning process, what it means, and how it works. Let’s get started.
What Is The Supply Planning Process?
In order to commence with the supply planning process, your demand plan has to have been completed and approved. So what is a demand plan? A demand plan is the sum of all sales that have been collected, reviewed, channels, and regional and customer forecasts.
Step 1: Translation
The first step is taking that demand plan and translation. What this means is that either you’re using supply chain planning software to allocate the demand plan according to the location where the demand for an item/customer relationship is usually fulfilled.
This automated system will then be able to use all the customer records to identify ship-from locations.
Step 2: Supply Plan
With the information processed in the translation phase, it’s time to run the supply plan. This first part of the plan generates a master production schedule by item and location. The plan includes important information like item-related attributes, on-hand quantities data, open and planned customer orders, lead times, open and planned shop orders, safety stocks, level loading, demand chase, and minimum order quantities.
Step 3: Implementation
With your plans laid out, it’s time to execute your vision. The supply plan is meant to be prepared for bumps along the way that you problem solve in real-time. So when preparing a supply plan, you need to consider all the possibilities. Don’t rule anything out for being too outlandish because the world of supply chains can be a tricky one to navigate and is always susceptible to delays or shortages. You need to have options to adequately deal with these potential issues when they arise.
Why It Matters
Supply plans are extremely important to any company. First, they’re able to streamline operations and reduce room for error. Beyond that, the benefits just keep coming. More benefits include enhancing efficiency, avoiding delays, bringing down overall operating costs, and more.
Suppose you are able to properly execute a supply plan. In that case, you are able to see a considerable reduction in costs associated with various processes in supply. For example, purchasing goods, production, logistics, and inventory management. A supply plan leaves no stone unturned and ensures everything has been considered.
All these various processes can be an intertwined web of plans and assessments. The best way to approach the multiple processes that are required to conduct proper S&OP is to use tools designed to help. Atlas Planning Platform by John Galt is just what you need to streamline your relationship with supply chains. So, get started today to work smarter, not harder.